Life expectancy among the elderly is increasing at a rate of nearly 1 month per year. This dramatic improvement in longevity has led to questions about whether morbidity is falling as well, or whether additional years of life are in a les healthy state. A spate of recent evidence suggests that disability among the elderly has been falling at least for the pas two decades (Allaire et al., 1999; Manton et al., 1997; Freedman and Martin, 1998, 1999), or at worst not increasing (Crimmins et al., 1997), and that people who live longer have less lifetime disability (Vita et al., 1998). This proposal seeks to understand disability trends among the elderly. The specific aims are: 1) to document trends in disability in different surveys, and reconcile differences across surveys; 2) to decompose changes in disability into changes in disease prevalence and changes in the extent of disability conditional on diseases; and 3) to differentiate among alternative economic and social explanations for declining disability. Three classes of theories in particular will be examined: (1) that disability change is a result of personal characteristics such as socioeconomic factors and individual behaviors; (2) that disability change results from changes in medical or assistive technologies; and (3) that disability change results from changes in the disease environment.